ANNAPOLIS – More Maryland banks than ever are adding surcharges for automatic teller use and the fees here have grown three times as fast as the national average, to $1.32 per transaction.
Those numbers were released Wednesday by MaryPIRG — the Maryland Public Interest Research Group — as part of a national study that accused banks of gouging customers with as much as $3 billion a year in extra ATM fees.
“This is pure profit for the banks,” said Del. Brian Moe, D- Prince George’s, who led a failed attempt this year to ban ATM surcharges in Maryland this year.
“(Charges) are getting from 50 cents to $1 to $2 and as high as $5,” Moe said. “Somewhere along the line there should be a stopping point.”
But bankers said they are providing a convenience for bank customers, who can avoid the fees simply by sticking to their own bank ATMs.
“The bottom line is that consumers should shop around,” said John B. Bowers Jr., executive vice president of the Maryland Bankers Association. “Freedom of choice is alive and well. Consumers should look at the disclosure and decide whether it’s in their best interest to use the ATM.”
Bowers accused MaryPIRG of “taking an isolated view of the industry.”
“What’s really going on in the marketplace is banks are offering enhanced value to consumers in the form of more locations of ATMs and increased services beyond traditional cash disbursement,” Bowers said.
Surcharges are the fees a bank charges for a customer of another bank to use their machine. They are levied in addition to any charge the customer’s own bank may be charging for the service and any fee the ATM network may tack on.
The surcharges began April 1, 1996, when ATM networks Plus and Cirrus lifted their ban on ATM owners — from banks like Crestar to retailers like 7-Eleven — charging additional user fees.
The U.S. Public Interest Research Group found last year that banks nationally were getting an average surcharge of $1.15 per transaction. In an update of that study, released Wednesday, the average surcharge had grown to $1.23 per transaction and the number of banks collecting the fee had grown 58 percent.
MaryPIRG said 94 percent of Maryland banks are now collecting the fee, up from 67 percent last year. In that period, the average fee has grown from $1.08 to $1.32 in the state.
“Consumers should not be charged two times for using an ATM once,” said Katie Nohe, a MaryPIRG consumer associate.
But a spokesman for Crestar said “nobody has to pay an ATM fee.”
“The vast majority of Crestar customers do not pay us fees,” said Barry Koling, the bank’s spokesman. “We do charge a fee of other banks and that is a matter of customer choice.”
Del. Liz Bobo, D-Howard, a cosponsor of Moe’s bill that would have outlawed surcharges in Maryland, said the issue will not go away.
“There is no need for consumers to be gouged for banks to make more money,” Bobo said at the MaryPIRG news conference.
Connecticut and Iowa have already banned ATM surcharges and 25 other states have considered such legislation this year, which has also been introduced in Congress, according to MaryPIRG.
A ban would be just fine for Debbie Olaya, who was using her ATM card at the Crestar on Annapolis’ Main Street Wednesday. The Crestar ATM hit her up for $2 in addition to the fee she was paying her own credit union for the service.
“Since I’m not from here, I don’t know where to shop around for a cheaper ATM,” said Olaya, who said she gets hit with convenience charges a lot because travel is a big part of her job.
“Basically I live with it,” said Olaya, a consultant from Bel Air. “I don’t like it, but I live with it.”